The Low Income Investment Fund (LIIF), Enterprise Community Partners (Enterprise), and Living Cities are working together through the Connect Initiative to promote equitable Transit Oriented Development (eTOD) as one of the most effective place-based solutions to increase social equity. This is the third in a series of three posts about best practices for public-private partnership (PPP) strategies in creating equitable communities.

Public agencies have the authority and opportunity to create proactive policies to support affordable housing, especially along key transit lines. The city of San Francisco, for example, recently approved a policy that will take the uncertainty out of the disposition of public sites for housing, ensuring that public lands are developed to include affordable housing as a public benefit. Earlier this year, the San Francisco Department of Public Works was set to sell a property at 30 Van Ness, a hot zone for housing development due to its proximity to public transit, a freeway entrance, and several major city arteries, to market-rate developers to build luxury condos. Housing advocates protested, demanding more affordable units, and the deal eventually broke down. When those negotiations crumbled, the city fortunately found Related California, a real estate company that plans to use a tax-exempt bond to increase the percentage of affordable housing at the site up to at least 20% (compared to the 12% required by the city’s area plan), and could potentially raise that number up to 33% with a city subsidy. While this story has a happy ending, it was a highly convoluted sale that could have collapsed at many points throughout the way, potentially resulting in the entire building going to market rate housing.

Increased Affordable Housing

33%
Real Estate Developed, Related California, plans to use a tax-exempt bond to increase the percentage of affordable housing up to 20%- and could potentially raise that number to 33% with a city subsidy.

Affordable housing was the top issue in the November 2015 election in San Francisco, with five ballot measures directly or indirectly addressing the city’s current housing crisis. Proposition K, which passed with almost 75% of votes, will prioritize the use of surplus public lands to go toward affordable housing, update the existing Surplus City Property Ordinance to increase its affordability requirements, strengthen the process for implementation, and expand the city’s priorities for affordable housing to include moderate and middle-income households. Making city-owned land available, at a discount, for affordable housing is a powerful way for San Francisco to promote and encourage affordable housing, a priority for the city.

These are two great examples demonstrating how policy can play an active role in promoting PPP developments. Here are a few additional suggestions about best policy practices for local governments and transit agencies when entering Private-Public Partnerships:

Adopt official policies. Following the lead of Proposition K in San Francisco, agencies should adopt policiesthat protect and enable suitable public land to be developed into affordable housing, for example by requiring review of major capital improvement project proposals, such as schools and libraries, for the potential to include residential development. Such policies create a more predictable and less politicized process for individual site disposition, which makes PPP more attractive to developers and more manageable for city staff.

Public agencies should develop shared, consistent strategies and guidelines for growth and development near transit centers. These strategies should include minimum affordability expectations for residential development on public land, target ranges for housing and transportation costs in station areas as with BART’s new policy, as well as land disposition and joint development policies.

Create standardized appraisal instructions for fair market value assessments, such as the covenants in Portland, Oregon that required affordable housing.

Expedite entitlement process near transit. When transit investments are expected, local jurisdictions have the power to think and act at the corridor level and take proactive measures to expedite the entitlement process.

Secure transit-oriented sites for public benefit. Public agencies should purchase land along incoming transit well before the stop opens. Patton Park in Portland, Oregon is one example of a development in which a proactive acquisition strategy allowed the agency to contribute to the stabilization of the neighborhood.

Amend zoning codes. Change zoning codes to allow for mixed-use, residential development near transit, but be thoughtful about the effects of “spot zoning.” Increasing zoning capacity may skew adjacent land owners’ perceptions of the value, regardless of market conditions.

Enacting changes in policy that support affordable housing and eTOD are a powerful way that public agencies can effect social change in their jurisdictions.

Special thanks to Amanda Salguero for her contribution to this series.

Craig Adelman began his career in real estate and community development in 1993 on the building and design end of the industry. With more than 20 years of development, lending and public sector experience, Craig now serves as LIIF’s Director of Transit Oriented Development, a national role focused on establishing and implementing equitable TOD throughout the country.

At Enterprise Community Partners, Devin Culbertson is focused on supporting individual projects and developing financing and policy solutions to ensure affordable housing and community facilities are built and preserved near transit.